The Gold Report
Gold futures fell to a three-month low in New York as a strengthening dollar reduced demand for the precious metal as an alternative investment.
The dollar rose against a basket of six major currencies and traded at an eight-month high against the euro. Gold sank 4.4% yesterday and is headed for a fourth straight weekly loss, while the dollar is up for the third consecutive week.
"The dollar just keeps gaining momentum," said Tom Schweer, a senior market strategist at LaSalle Futures Group Inc. in Chicago. "Realistically, gold could fall another $20 to $40 before people start to load up again."
Gold futures for April delivery fell $4, or 0.4%, to $1,059 an ounce at 11 a.m. on the Comex division of the New York Mercantile Exchange. Yesterday, gold's $49 loss was the biggest percentage drop for a most-active contract since Dec. 1, 2008. The metal is down more than 2% this week.
"Yesterday's global margin-call will reverberate in the markets for some time to come," said Jon Nadler, a Kitco Inc. analyst in Montreal.
Decline an Opportunity
A drop in prices may be an opportunity to buy, analysts and traders said.
"This is the only metal we would wish to be long of," said Dennis Gartman, editor of the Gartman Letter.
Gold may fall to $800 before rebounding to a record when investors realize the U.S. government has exhausted tools to revive the economy, said Tom Winmill, a New-York based portfolio manager of the Midas Fund. In December, he predicted gold may average $1,500 in the fourth quarter of 2010.
"The Fed won't be able to raise rates, given the employment situation and current fiscal burden. Conditions are in place for higher gold prices," said Winmill.
Notable Quotes
"RGLD is an established, well-managed company with good cash hoards." (6/19/13) Royal Gold Inc. - The Gold Report Interview with David H. Smith More >
"GRG outlined ~110 Moz Ag eq at Chinchillas, and it has barely scratched the surface." (6/17/13) Golden Arrow Resources Corp. - The Gold Report Interview with Jay Taylor More >
"PZG has deep pockets and is definitely a takeover target." (6/17/13) Paramount Gold and Silver Corp. - The Gold Report Interview with Jay Taylor More >
"TMM has good cash flow and is in a position to grow organically." (6/17/13) Timmins Gold Corp. - The Gold Report Interview with Jay Taylor More >
"There clearly is a an opportunity at hand given CSI's valuation." (6/14/13) Colossus Minerals Inc. - Jamie Spratt, Clarus Securities More >
Gold at 3-Month Low Offers Opportunity
Source: Bloomberg, Pham-Duy Nguyen (2/5/10)
"The Fed won't be able to raise rates. . .conditions are in place for higher gold prices"
More Experts
"We are resuming coverage on DGC and reiterate our Outperform rating." (6/13/13) Detour Gold Corp. - Michael Siperco, Macquarie Capital Markets More >
"SCZ released the best intercept to date at Gavilanes; we view it as very impressive." (6/13/13) Santacruz Silver Mining Ltd. - Kwong-Mun Achong Low, Jennings Capital More >
"CTG had some stellar results from the recently completed drill program at Strieborná." (6/12/13) Global Minerals Ltd. - Deborah Bacal, Proactive Investors More >
"AVA's grades are around 1 g/t, with lots of exploration potential." (6/17/13) Aurvista Gold Corp. - The Gold Report Interview with Jay Taylor More >
"We saw insider buying in DGC, which has gone to the capital markets to raise money." (6/14/13) Detour Gold Corp. - The Gold Report Interview with Ted Dixon More >